Jan 5, 2024 - News

Policy group says Youngkin tax plan would mostly benefit the wealthy

Illustration of the Virginia State Capitol with lines radiating from it.

Illustration: Brendan Lynch/Axios

Virginans who make $58,000 a year or less would pay more in taxes each year under Gov. Glenn Youngkin's proposed tax plan, according to an analysis by a progressive fiscal policy group.

Driving the news: The Commonwealth Institute for Fiscal Analysis estimates that Virginians who make $30,000 or less would see an average tax increase of $44 a year; folks who make up to $58,000 would end up paying $5 more annually on average, VPM reports.

  • Meanwhile, the state's wealthiest residents — those making $763,000 — would pay an average of $9,640 less a year, according to the group's analysis.

Of note: The plan would reduce tax revenues by $3.5 billion across fiscal years 2025 and 2026, and two-thirds of that would benefit the top 20% of Virginians, according to the analysis.

Be smart: The General Assembly this year will consider Youngkin's proposed tax plan, which increases the state sales tax from 4.3% to 5.2% and cuts personal income taxes across-the-board by 12%.

  • It will also expand the state's sales tax to cover digital services, like streaming subscriptions, which currently aren't taxed in Virginia. The expanded tax wasn't included in the analysis.

The other side: The Youngkin administration disagrees with the analysis, per VPM.

  • Its model by the state's tax agency shows $141 in annual savings for single filers making $35,000 a year and $243 in savings for married taxpayers with two dependents who make $75,000.

What's next: The state legislature will consider the proposal during its session, which starts on Wednesday.

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